Truck Financing in Quebec with a 600-700 Credit Score
Navigating the truck loan market in Quebec with a credit score in the 600 to 700 range places you in a unique position. You're often considered a "near-prime" borrower-you have access to more options than someone with poor credit, but you won't qualify for the prime rates advertised on TV. This calculator is designed specifically for your situation, helping you budget for a truck over a 72-month term.
A 72-month (6-year) term is a popular choice for truck buyers as it helps keep monthly payments manageable on more expensive vehicles. However, it's important to understand the trade-off: a longer term means you'll pay more in total interest over the life of the loan. Let's break down the numbers.
How This Calculator Works: Understanding Your Real Costs
This tool estimates your monthly payment based on key factors. But to use it effectively, you must understand how lenders in Quebec will structure your loan.
- Vehicle Price: The sticker price of the truck you want.
- Down Payment: The cash you put down upfront. For a 600-700 credit score, lenders often prefer to see a down payment of 10-20%, as it reduces their risk.
- Trade-In Value: The value of your current vehicle. Be cautious of negative equity, where you owe more on your current car than it's worth. If you find yourself in this situation, it's crucial to understand your options. For more on this, check out our guide on Your Negative Equity? Consider It Your Fast Pass to a New Car.
- Interest Rate (APR): This is the most critical variable. With a 600-700 score, expect an APR between 8% and 15%, depending on the lender, the age of the truck, and your overall financial profile.
- The Quebec Tax Reality: Vehicle purchases in Quebec are subject to GST (5%) and QST (9.975%), for a combined sales tax of 14.975%. This is added to your purchase price. For example, a $35,000 truck will have a total financed amount of $40,241.25 before any other fees.
Example Scenarios: 72-Month Truck Loan in Quebec
Let's look at some realistic monthly payment estimates for different truck prices. These examples assume a 11.99% APR, a common rate for the 600-700 credit range, and include the 14.975% Quebec sales tax. We've assumed a $2,000 down payment.
| Vehicle Sticker Price | Price + Tax (14.975%) | Total Financed (after $2k down) | Estimated Monthly Payment (72 mo @ 11.99%) |
|---|---|---|---|
| $30,000 | $34,492.50 | $32,492.50 | ~$635 |
| $40,000 | $45,990.00 | $43,990.00 | ~$860 |
| $50,000 | $57,487.50 | $55,487.50 | ~$1,085 |
Disclaimer: These are estimates for illustrative purposes only. Your actual payment will vary based on the final approved interest rate, vehicle, and lender terms (OAC).
Your Approval Odds: What Lenders See
With a score between 600 and 700, lenders see you as a recovering or rebuilding borrower. They will look closely at your stability and capacity to pay.
- Income Stability: Lenders want to see consistent, provable income for at least 3-6 months.
- Debt-to-Service Ratio (TDSR): This is crucial. Lenders generally want your total monthly debt payments (including the new truck loan) to be less than 40-45% of your gross monthly income. A high payment like the $1,085 example above would require a gross monthly income of at least $2,500-$2,700 just to cover that one payment, not including rent or other debts.
- Credit History Details: A score of 650 after a consumer proposal is viewed more favourably than a 650 with recent missed payments. If you're rebuilding your credit after a proposal, specialized lenders are very familiar with your situation. Learn more about your options in our guide: Your Consumer Proposal? We're Handing You Keys.
- Down Payment: While zero-down options exist, providing a down payment significantly increases your approval chances and can help you secure a better interest rate. Even if you think you can't afford one, there are strategies to get into a vehicle. Discover more here: No Down Payment? Your Gig Just Bought a Hybrid. Seriously.
Frequently Asked Questions
What interest rate can I expect for a truck loan in Quebec with a 650 credit score?
For a credit score of 650 in Quebec, you can typically expect an interest rate (APR) ranging from 8% to 15% for a truck loan. The final rate depends on the lender, the age and mileage of the truck (newer vehicles often get better rates), the size of your down payment, and your overall income stability.
How is sales tax calculated on a truck purchase in Quebec?
In Quebec, you pay both the federal Goods and Services Tax (GST) of 5% and the Quebec Sales Tax (QST) of 9.975%. The QST is calculated on the price including the GST, resulting in a combined effective tax rate of 14.975%. This tax is applied to the final sale price of the vehicle and is included in the total amount you finance.
Is a 72-month loan a good idea for a truck?
A 72-month (6-year) loan can be a good tool to make a truck affordable by lowering the monthly payment. However, the main drawback is that you will pay significantly more in total interest over the life of the loan. It also increases the risk of being in a negative equity position (owing more than the truck is worth) for a longer period.
Can I get approved for a truck loan with a 600-700 score if I have a low income?
Approval depends on your debt-to-service ratio (DSR). Lenders in Quebec want to ensure your total monthly debt payments (including the new truck) do not exceed about 40% of your gross monthly income. If the truck payment makes your DSR too high, you may need to choose a less expensive vehicle, provide a larger down payment, or find a co-signer to get approved.
How much of a down payment do I need for a truck with fair credit?
While some lenders offer zero-down options, a down payment is highly recommended for borrowers in the 600-700 credit range. Putting down at least 10% of the vehicle's price significantly improves your approval odds, can help lower your interest rate, and reduces the amount you need to finance. For a $40,000 truck, this would be a $4,000 down payment.
